5 Big-Name Bankruptcies of 2012

Photo (cc) by Christian Cable

The liquidation of the iconic Hostess Brands has been in and out of the news for months following the company’s filing for bankruptcy protection earlier this year.

But the manufacturer of the beloved Twinkie is hardly the only company to visit bankruptcy court in 2012…

Kodak

The 120-year-old Eastman Kodak Company, as well as its subsidiary Eastman Kodak International Capital Company Inc., filed a petition for bankruptcy protection on Jan. 19, seeking to reorganize under Chapter 11 of the U.S. Bankruptcy Code so the camera manufacturer could repay its debts over time.

The company’s refinancing plans were recently approved.

“A U.S. Bankruptcy Court judge on [Dec. 14] signed off on Kodak entering into an $830 million agreement to help keep it afloat.” But, the Democrat and Chronicle reported, “A number of conditions must be met before Kodak actually can borrow any of the money, including sale of its digital imaging patent portfolio.”

Kodak reportedly plans to sell the patents for $525 million to a group of buyers that includes Apple and Google.

American Suzuki

American Suzuki Motor Corporation filed for Chapter 11 bankruptcy protection on Nov. 5, announcing plans to “realign” its business. The U.S. arm of the Japanese car manufacturer said it will stop selling new cars, instead manufacturing parts exclusively and focusing on its motorcycle/ATV and marine divisions.

If you own a Suzuki, the company says it will continue to honor all warranties.

If you want a Suzuki, Consumer Reports says, “Rest assured, deep discounts will be offered. However, you must weigh the initial, upfront savings against the inevitably accelerated depreciation and potential long-term service challenges.”

Betsey Johnson

Betsey Johnson LLC, better known as simply “Betsey Johnson,” filed for Chapter 11 bankruptcy protection on April 26. The company, founded by the colorful 70-year-old designer Betsey Johnson, has closed its stores but its brand lives on under new ownership (shoe company Steve Madden).

The New York Times recently reported that Betsey Johnson will debut a lower-priced clothing line at department stores in January 2013.

Elsewhere in the fashion world, United Retail Group, the parent company of the plus-size clothing chain Avenue, filed for Chapter 11 protection on Feb. 1.

City of San Bernardino, Calif.

On Aug. 1, San Bernardino filed a petition for Chapter 9 bankruptcy protection, which allows municipalities to reorganize. According to the petition, the city estimated that it owed money to more than 10,000 creditors.

In a resolution adopted two weeks earlier, the mayor and city council declared a “fiscal emergency” and determined the city of 213,000 residents would run out of money within 60 days without bankruptcy protection, the petition states.

But San Bernardino was just the latest California city to request Chapter 9 protection in 2012. The Town of Mammoth Lakes (population 8,300) filed on July 3. A judge dismissed the case on Nov. 16, after the town reached a settlement with its biggest creditor.

The City of Stockton (population 296,000) filed on June 28. Its case, and that of San Bernardino, are still working their way through court.

Octomom

On April 30, Nadya “Octomom” Suleman filed a petition for personal bankruptcy protection under Chapter 7. A judge dismissed her claim two weeks later because the single mother of 14, famous for birthing octuplets via in-vitro fertilization in 2009, failed to file required documents.

Suleman lost her Orange County, Calif., home to foreclosure in June. She most recently made the news for her porn debut, “Octomom Home Alone,” which was nominated for four Adult Video Network Awards in November – and reportedly helped Suleman secure a new house.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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